Manila

SECOND DIVISION
MANUEL M. SERRANO,
Petitioner,
G. R. No. L-30511
February 14, 1980
-versusCENTRAL BANK OF THE PHILIPPINES,
OVERSEAS BANK OF MANILA,
EMERITO M. RAMOS, SUSANA B. RAMOS,
EMERITO B. RAMOS, JR., JOSEFA RAMOS DELA RAMA,
HORACIO DELA RAMA, ANTONIO B. RAMOS, FILOMENA
RAMOS LEDESMA, RODOLFO LEDESMA, VICTORIA RAMOS
TANJUATCO, and TEOFILO TANJUATCO,
Respondents.

RESOLUTION
CONCEPCION, JR., J.:
Petition for Mandamus and Prohibition, with Preliminary Injunction,
that seeks the establishment of joint and solidary liability to the
amount of Three Hundred Fifty Thousand Pesos, with interest,
against respondent Central Bank of the Philippines and Overseas
Bank of Manila and its stockholders, on the alleged failure of the
Overseas Bank of Manila to return the time deposits made by
petitioner and assigned to him, on the ground that respondent
Central Bank failed in its duty to exercise strict supervision over

respondent Overseas Bank of Manila to protect depositors and the

general public. [1] Petitioner also prays that both respondent banks
be ordered to execute the proper and necessary documents to
constitute all properties listed in Annex "7" of the Answer of
respondent Central Bank of the Philippines in G. R. No. L-29352,
entitled "Emerita M. Ramos, et al. vs. Central Bank of the
Philippines," into a trust fund in favor of petitioner and all other
depositors of respondent Overseas Bank of Manila. It is also prayed
that the respondents be prohibited permanently from honoring,
implementing, or doing any act predicated upon the validity or
efficacy of the deeds of mortgage, assignment. and/or conveyance
or transfer of whatever nature of the properties listed in Annex "7"
of the Answer of respondent Central Bank in G. R. No. 29352. [2]
A
sought
for ex-parte preliminary
injunction
against
both
respondent banks was not given by this Court.
Undisputed pertinent facts are:
On October 13, 1966 and December 12, 1966, petitioner made a
time deposit, for one year with 6% interest, of One Hundred Fifty
Thousand Pesos [P150,000.00] with the respondent Overseas Bank
of Manila. [3] Concepcion Maneja also made a time deposit, for one
year with 6-% interest, on March 6, 1967, of Two Hundred
Thousand Pesos [P200,000.00] with the same respondent Overseas
Bank of Manila. [4]
On August 31, 1968, Concepcion Maneja, married to Felixberto M.
Serrano, assigned and conveyed to petitioner Manuel M. Serrano,
her time deposit of P200,000.00 with respondent Overseas Bank of
Manila. [5]
Notwithstanding series of demands for encashment of the
aforementioned time deposits from the respondent Overseas Bank
of Manila, dating from December 6, 1967 up to March 4, 1968, not
a single one of the time deposit certificates was honored by
respondent Overseas Bank of Manila. [6]
Respondent Central Bank admits that it is charged with the duty of
administering the banking system of the Republic and it exercises
supervision over all doing business in the Philippines, but denies the
petitioner's allegation that the Central Bank has the duty to exercise
a most rigid and stringent supervision of banks, implying that
respondent Central Bank has to watch every move or activity of all
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banks, including respondent Overseas Bank of Manila. Respondent

Central Bank claims that as of March 12, 1965, the Overseas Bank
of Manila, while operating, was only on a limited degree of banking
operations since the Monetary Board decided in its Resolution No.
322, dated March 12, 1965, to prohibit the Overseas Bank of Manila
from making new loans and investments in view of its chronic
reserve deficiencies against its deposit liabilities. This limited
operation of respondent Overseas Bank of Manila continued up to
1968. [7]
Respondent Central Bank also denied that it is guarantor of the
permanent solvency of any banking institution as claimed by
petitioner. It claims that neither the law nor sound banking
supervision requires respondent Central Bank to advertise or
represent to the public any remedial measures it may impose upon
chronic delinquent banks as such action may inevitably result to
panic or bank "runs". In the years 1966-1967, there were no
findings to declare the respondent Overseas Bank of Manila as
insolvent. [8]
Respondent Central Bank likewise denied that a constructive trust
was created in favor of petitioner and his predecessor in interest
Concepcion Maneja when their time deposits were made in 1966
and 1967 with the respondent Overseas Bank of Manila as during
that time the latter was not an insolvent bank and its operation as a
banking institution was being salvaged by the respondent Central
Bank. [9]
Respondent Central Bank avers no knowledge of petitioner's claim
that the properties given by respondent Overseas Bank of Manila as
additional collaterals to respondent Central Bank of the Philippines
for the former's overdrafts and emergency loans were acquired
through the use of depositors' money, including that of the
petitioner and Concepcion Maneja. [10]
In G. R. No. L-29362, entitled "Emerita M. Ramos, et al. vs. Central
Bank of the Philippines," a case was filed by petitioner Ramos,
wherein respondent Overseas Bank of Manila sought to prevent
respondent Central Bank from closing, declaring the former
insolvent, and liquidating its assets. Petitioner Manuel Serrano in

this case, filed on September 6, 1968, a motion to intervene in G.

R. No. L-29352, on the ground that Serrano had a real and legal
interest as depositor of the Overseas Bank of Manila in the matter in
litigation in that case. Respondent Central Bank in G. R. No. L29352 opposed petitioner Manuel Serrano's motion to intervene in
that case, on the ground that his claim as depositor of the Overseas
Bank of Manila should properly be ventilated in the Court of First
Instance, and if this Court were to allow Serrano to intervene as
depositor in G. R. No. L-29352, thousands of other depositors would
follow and thus cause an avalanche of cases in this Court. In the
Resolution dated October 4, 1968, this Court denied Serrano's
motion to intervene. The contents of said motion to intervene are
substantially the same as those of the present petition.[11]
This Court rendered Decision in G. R. No. L-29352 on October 4,
1971, which became final and executory on March 3, 1972,
favorable to the respondent Overseas Bank of Manila, with the
dispositive portion to wit:
WHEREFORE, the writs prayed for in the petition are hereby granted
and respondent Central Bank's Resolution Nos. 1263, 1290 and
1333 [that prohibit the Overseas Bank of Manila to participate in
clearing, direct the suspension of its operation, and ordering the
liquidation of said bank] are hereby annulled and set aside; and said
respondent Central Bank of the Philippines is directed to comply
with its obligations under the Voting Trust Agreement, and to desist
from taking action in violation therefor. Costs against respondent
Central Bank of the Philippines. [12]
Because of the above Decision, petitioner in this case filed a motion
for judgment in this case, praying for a decision on the merits,
adjudging respondent Central Bank jointly and severally liable with
respondent Overseas Bank of Manila to the petitioner for the
P350,000 time deposit made with the latter bank, with all interests
due therein; and declaring all assets assigned or mortgaged by the
respondents Overseas Bank of Manila and the Ramos groups in
favor of the Central Bank as trust funds for the benefit of petitioner
and other depositors. [13]
By the very nature of the claims and causes of action against
respondents, they, in reality are recovery of time deposits plus

interest from respondent Overseas Bank of Manila, and recovery of

damages against respondent Central Bank for its alleged failure to
strictly supervise the acts of the other respondent Bank and protect
the interests of its depositors by virtue of the constructive trust
created when respondent Central Bank required the other
respondent to increase its collaterals for its overdrafts said
emergency loans, said collaterals allegedly acquired through the use
of depositors money. These claims shoud be ventilated in the Court
of First Instance of proper jurisdiction as We already pointed out
when this Court denied petitioner's motion to intervene in G. R. No.
L-29352. Claims of these nature are not proper in actions for
mandamus and prohibition as there is no shown clear abuse of
discretion by the Central Bank in its exercise of supervision over the
other respondent Overseas Bank of Manila, and if there was,
petitioner here is not the proper party to raise that question, but
rather the Overseas Bank of Manila, as it did in G. R. No. L-29352.
Neither is there anything to prohibit in this case, since the
questioned acts of the respondent Central Bank [the acts of
dissolving and liquidating the Overseas Bank of Manila], which
petitioner here intends to use as his basis for claims of damages
against respondent Central Bank, had been accomplished a long
time ago.
Furthermore, both parties overlooked one fundamental principle in
the nature of bank deposits when the petitioner claimed that there
should be created a constructive trust in his favor when the
respondent Overseas Bank of Manila increased its collaterals in favor
of respondent Central Bank for the former's overdrafts and
emergency loans, since these collaterals were acquired by the use
of depositors' money.
Bank deposits are in the nature of irregular deposits. They are really
loans because they earn interest. All kinds of bank deposits,
whether fixed, savings, or current are to be treated as loans and are
to be covered by the law on loans. [14] Current and savings deposits
are loans to a bank because it can use the same. The petitioner
here, in making time deposits that earn interests with respondent
Overseas Bank of Manila was, in reality, a creditor of the respondent
Bank and not a depositor. The respondent Bank was in turn a debtor
of petitioner. Failure of he respondent Bank to honor the time
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deposit is failure to pay its obligation as a debtor and not a breach

of trust arising from depositary's failure to return the subject matter
of the deposit
WHEREFORE, the petition is dismissed for lack of merit, with costs
against petitioner.
SO ORDERED.
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Antonio,
and
Abad
Santos, JJ.,
concur.
Barredo, J., concur in the judgment and on the concurring
opinion
of
Justice
Aquino.

Separate Opinion
AQUINO, J.,
Concurring:
The petitioner prayed that the Central Bank be ordered to pay his
time deposits of P350,000, plus interests, which he could not
recover from the distressed Overseas Bank of Manila, and to declare
all the assets assigned or mortgaged by that bank and the Ramos
group to the Central Bank as trust properties for the benefit of the
petitioner and other depositors.
The petitioner has no causes of action agianst the Central Bank to
obtain those reliefs. They cannot be granted in petitioner's instant
original actions in this Court for mandamus and prohibition. It is not
the Central Bank's ministerial duty to pay petitioner's time deposits
or to hold the mortgaged properties in trust for the depositors of the
Overseas Bank of Manila. The petitioner has no cause of action for
prohibition, a remedy usually available against any tribunal, board,
corporation or person exercising judicial or ministerial functions.
Since the Overseas Bank of Manila was found to be insolvent and
the Superintendent of Banks was ordered to take over its assets
preparatory to its liquidation under Section 29 of Republic Act No.
265 [p. 197, Rollo, Manifestation of September 19, 1973],
petitioner's remedy is to file his claim in the liquidating proceeding
(Central Bank vs. Morfe, L-38427, March 12, 1975, 63 SCRA 114;
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Hernandez vs. Rural Bank of Lucena, Inc., L-29791, January 10,

1978,
81
SCRA
75].